Tax Incentives

The State of Montana offers businesses a variety of tax credits, reductions and rebates in order to provide incentives to companies to locate to Montana and to expand and increase wages. A couple of exciting new tax incentives promoted by Governor Schweitzer were just made into law in the 2005 legislative session. HB 584 created the "Big Sky on the Big Screen" Act which offers up to $1,000,000 in tax credits to film and TV productions that shoot in Montana. These are refundable tax credits, which means that even though a production company may have no corporate tax liability following a production shot in Montana, the company can still receive a payment up to a million dollars from the Department of Revenue based on qualified Montana labor and materials expenditures. Detailed information on this great new film and TV tax incentive is available at montanafilm.com. The "Big Sky on the Big Screen" tax credit coupled with a federal tax incentive enacted in 2004 has made Montana a very profitable location for film companies.

Another tax incentive passed in 2005 was Senate Bill No. 293 which is intended to promote the development of an ethanol industry in Montana. SB 293 requires a 10% blend of ethanol in low and mid grade gasoline within 12 months after the department of transportation has certified that the state of Montana has produced 40 million gallons of denatured ethanol and has maintained that level of production on an annualized basis for at least 3 months. Up to $6 million a year is available to subsidize three ethanol companies that will build plants and produce ethanol here in Montana. The first to produce the ethanol will receive the tax incentives and there are currently several ethanol plant projects in various stages of development.

There are numerous specialized tax incentives, which can be researched with the Department of Revenue on a case by case basis and can be found by clicking in the accompanying links. (Business Tax Incentives)

Corporate Tax Incentives

The Corporate License Tax link provides information about incentives classified under corporate license tax. The list provided is ordered alphabetically by subject area. The New/Expanded Industry Credit found on this list is particularly well suited to businesses seeking to open a new facility or expand an existing one. The features of the New/Expanded Industry Credit are:

  • Eligibility: Manufacturing companies.
  • Qualifying Expenditures: Increase total full time employment by at least 30%.
  • Benefit: The total amount of the credit is 1% of the total wages paid to new employees. Credit is available during the first three years following initiation or expansion of the manufacturing operation. Credit limited to the year in which it is earned.

Natural Resource Tax Incentives

The Natural Resource Tax link provides information about incentives classified under natural resource tax. These natural resource incentives relate to certain exemptions from Coal Severance taxes, Metal Mine License taxes, Oil Stripper Well exemptions and reduced rates for certain types of oil and gas production.

Gasoline and Vehicle Tax Incentives

The Gasoline and Vehicle Taxes link provides information about incentives classified under gasoline and vehicle taxes and consists of the ethanol tax credit passed in the 2005 legislature previously discussed on this web page.

A biodiesel blending and storage tax credit is available to some individuals, corporations, partnerships, or small business corporations, as defined in statute. Those eligible may receive a credit against taxes imposed for the cost of storage and blending equipment to be used for blending biodiesel with petroleum diesel.

Property Tax Incentives

The Property Tax Incentives link provides information about the exemptions and incentives classified under property tax.

Property tax incentives generally fall into three categories: property tax abatements, property tax exemptions, and suspension/cancellation of delinquent property taxes.

  • Property tax abatements result in a reduction in the taxable value of the property. This is accomplished by directly reducing the taxable value of property or by applying a reduced tax rate to the property's assessed value.
  • Property tax exemptions exclude part or all of the property value from taxation.
  • Suspensionor cancellation of delinquent property taxes may be offered to facilitate the purchase and/or continued operation of a business.

Local Tax Incentives

Many tax related programs are also available through local governments such as the tax increment financing program, the new industry tax break, expanding and historic properties, and much more. These can be accessed by contacting units of local government or local development organizations.